Thank you. Good morning, ladies and gentlemen.

I'm Shveta Arya, Managing Director of Cummins India Limited. I hope you all are doing well.

Shoma Ghosh, CFO of Cummins India Limited, joins me on the call. Thank you all for joining us today.

Now I would like to share the financial results of Quarter 3, financial year '25-26 through this call. For the quarter ended December 31st, 2025, with respect to the same quarter last year, our sales at ₹3,006 crores are broadly stable, though marginally lower by 1% compared to the same quarter last year.

Domestic sales at ₹2,535 crores are slightly lower by 2%. Exports at ₹471 crores are higher by 2%.

Profit before tax before exceptional items at ₹719 crores is higher by 7%. Profit before tax after exceptional items at ₹593 crores is lower by 12%.

For the quarter ended December 31st, 2025, with respect to the last quarter, our sales at ₹3,006 crores are marginally lower by 4% compared to ₹3,122 crores recorded in the last quarter. Domestic sales at ₹2,535 crores are lower by 2%.

Exports at ₹471 crores are lower by 14%. Profit before tax before exceptional items at ₹719 crores is lower by 14%, and profit before tax after exceptional items at ₹593 crores is lower by 29%.

Segment-wise breakups for the same quarter, which ended December 31st, 2025: For the domestic business, PowerGen domestic sales are at ₹1,069 crores, there was 16% decrease over last year and a 20% decrease over last quarter. Distribution business sales are at ₹939 crores, 26% increase over last year and 18% increase over last quarter.

Industrial business sales for the domestic business at ₹464 crores is a 9% decrease over last year and 20% increase over last quarter. From the exports point of view, high-horsepower exports are at ₹232 crores, there's a 15% increase over last year and 17% decrease over last quarter.

Low-horsepower exports are at ₹186 crores, which is a 14% decrease over same quarter last year and 15% decrease over last quarter. Regarding the sales outlook for the financial year '26, we expect to have double-digit revenue growth over the previous fiscal year, which is supported by demand across all our key segments.

With that, I now open the session for questions. Thank you so much.

Hi, thanks for the opportunity. I just want to see if you could help us with the volume growth in the past quarters, as well as 9 months FY '26.

We want to get a sense on how much of the top line is driven by volumes versus pricing. That's my first question.

Hi, Shirom. Thanks for the question.

Our revenue is a mix of PowerGen across many nodes and then industrial business and distribution. It's a mixed bag.

There is volume growth in certain spaces in power generation. There is also pricing impact.

Distribution business, of course, has a lot of volume growth as well as pricing. It's a mix.

It's both volume and pricing. It'll be difficult for us to separate that out segment by segment for you and share that.

Sure. Could you also share anything on your market share movement?

Have you gained or lost market share in the past quarter, in the past 9 months, if you could help us with that?

We do not have any syndicated research numbers available for this quarter which can tell us what the market share would be. Unfortunately, I will not be able to give that information.

Sure. Just last question.

You shared FY '26 you're expecting double-digit growth. Do you have any color on FY '27?

Should we continue to expect double-digit growth next year as well?

Given that the Indian economy is doing well, GDP projections are still in the range of 7% or thereabouts for the next financial year. The budget is seemingly positive for investments in the infrastructure segment.

For the domestic growth, I can say that for financial year '27, we will target double-digit growth. Exports is another matter altogether, where there are a lot of moving pieces.

Geopolitical conditions not stable, lot of economic activity impacted due to different tariff-related equations playing out at this point in time. Exports difficult to say.

Domestic, we're more positive and can definitely say that we will target double-digit growth.

Great. Thank you so much.

Thank you.

Hi, Shveta. Congratulations on a good quarter.

Shveta, in this quarter, we have seen a decline in the PowerGen revenues, 16%, ₹1,069 crores. Even last year, if I see, it's ₹1,271 crores.

There is a data center element in both these quarters. Just to understand more color on the core growth excluding data centers, if you could help us quantify what was the contribution of data center in this quarter and last quarter, and what was the core growth in the PowerGen business?

Yes, thanks for the question, Parikshit. I had mentioned in my commentary for the last quarter that we had extremely good data center execution, and that business is lumpy business.

That, because we had done the execution last quarter, that did not come in the Quarter 3 of financial year FY '25-26. That is the only difference.

Other than that, our core PowerGen business has grown at a steady rate, just as it has been growing in the past few quarters. There's no change in that.

The only difference is data center execution, which happened in the quarter before, not in this one.

Last quarter, if I see, ₹1,271 crores of revenue in Q3 FY '25. That in the last call, you had said that in Q3 FY '25 call that there was impact of data center.

If I have to understand that if this quarter there is no data center, then like-to-like, what is the growth on PowerGen? Q3, it was about 20% in last call you had mentioned, excluding data center.

Just want to understand the health of the core PowerGen business, what will be the growth if you can quantify that way also?

It is steady growth. It's not exactly 20%, but it is good growth, very close to double digits.

It is not exactly 20%.

Okay. Now, if I look at the budget, government has given taxation in these data centers investments in India, and even in this year, we have seen good orders coming in.

Just wanted to understand from you how is the data center pipeline building out both in

One second. Hello, is it better now?

Shweta, I was asking you that government has given a huge tax incentive in the budget on data center investments in India, and we have also seen that we have been getting direct orders and OEM orders which we do through the OEMs. How's the data center pipeline building out in next 1 or 2 years?

Any color on that will be helpful.

Data center pipeline is building out very well. As you rightly said, the tax incentives have been announced recently.

We are yet to see the impact of that. Nevertheless, lot of movement in the data center market in India, some announcements.

For the next 3 to 4 years, we do anticipate positive movement in the data center segment in India.

What has been the contribution in 9 months on the numbers on the data center side? Also lastly, on the gross margins, we have seen very strong gross margins, but again there has been a big uptake in other expenses.

If you can explain the difference between the two. Those will be my last questions, yeah.

On the data center contribution, data center contribution overall for our business stays bit around 25% of the PowerGen revenue. That's on an average, because it's a lumpy business, I would not say anything quarter-on-quarter.

Then on the other expenses, we have a one-time true-up in our expenses. In some quarters before, I had spoken about a true-down, so that was a benefit to us, and this time there's a true-up.

Overall for the year, if you'll see, this will even out.

Is it one-time or is it recurring? How does one read it?

Whether we need to remove

One-time. This is one-time.

No, this is one-time for this quarter.

How much the quantification of that amount and value just to arrive at the core EBITDA margins if we have to arrive at?

Roughly ₹50 crores.

Okay. Thank you, Shveta, and wish you all the best.

Thank you.

Yeah. Good morning and thanks for the opportunity.

My first question is how do you think about the impact of EU FTA on your business? Do you have any color to share?

Hi, Mohit. EU FTA, we do have some business where we directly export to the EU region, we are evaluating the impact.

Right now not able to share. Hypothetically looks positive, but yes, we do have business there and it will have a positive impact.

Is the impact on the cost side or from the business opportunity side? Can you please help us?

Evaluating that. Evaluating that, Mohit.

Not yet in a space to share that. We are evaluating whether it could have impact on getting higher business.

Understood. Just one qualitative question.

Can you just give some color on the inquiry pipeline from data center compared to what you're seeing right now compared to what you're seeing at the beginning of the fiscal? Yeah.

Data center space in India, we have hyperscalers and co-located players. Hyperscalers are the likes of Microsoft, Google, Amazon, which do big announcements, big sites.

Then we have co-located players here in India. If I were to compare now versus start of the fiscal, there are some more new announcements coming in from the hyperscalers.

There is more activity on that end. On the co-located players, the colo players, it's been steady.

There was good inquiries at the start of the fiscal, continues to be so throughout the fiscal. That's how I would talk about inquiries.

Yeah. Thank you, and best of luck.

Thank you, ma'am.

Thanks, Mohit.

Hi. Good morning, ma'am.

Ma'am, two questions. One, on the exports, given that the third quarter we had seen weak exports, can you break this up geographically to understand which particular geographies are really impacting the overall exports?

The second question is, given that a lot of parents' capacities kind of used up to serve data center market in the American region, I want to understand if you are getting demand or inquiries for data center from other geographies? Thank you.

Thanks for the question, Rahul. On the export side, I have been saying this for the last few quarters that there's no particular trend from any market.

If you were to just ask me about the last quarter, we saw revenues increasing for Asia-Pac and Europe. The other markets did not really grow as much.

That is from an exports point of view. The demand for data centers from other geographies: Demand for data centers today is growing hugely in two markets: the United States and China.

In both those places, Cummins is serving those markets locally.

Okay. The reason I had asked that was, Gulf region has seen a lot of cancellation or delays in orders.

I just wanted to understand and I think you did indicate that other markets will include Gulf or Middle Eastern market. Apparently, that market is also talking about significant capacity addition on the data center.

No inquiries from that market at all?

Rahul, your voice was breaking.

I hope this is better. I just wanted to follow up on the earlier question, where you did indicate that barring Asia-Pacific and European market, the revenue was impacted.

Is it possible you can quantify the Gulf region or the Middle Eastern market, how badly that was impacted? While US and China are the key data center market, a lot of Gulf states are talking about data center being planned in that region.

I want to know if are you getting any inquiries from the Gulf region for data center specifically? Thank you.

I'll answer the data center from the Gulf region first. There are talks, but there are no specific inquiries just yet from the Gulf region.

Not enough activity on the data center space yet on the ground. From an exports perspective, you asked me how low is the Gulf region.

This is very regular. In some quarters, we get orders from the Middle East; in some quarters, we don't.

There's no trend here. I would rather not talk about how low it is.

Sure. Thank you very much.

I had some more questions, but I'll fall in the line. Thank you.

Thank you.

Good morning, madam. Thank you so much for the opportunity.

Madam, on the export side, I think which are the regions are showing like a silence and which are the facing most significant headwind and how our company's export product mix are changing right now in terms of low HP and high HP engines and complete gensets? I just want to understand in terms of tariff perspective also, how this product mix is changing and which are the products we are seeing high level of inquiries and which are the products customer side delaying

it? From an exports perspective, the markets which grew for us in the last quarter were Asia-Pacific and Europe.

The other markets, not so much. This keeps changing quarter-on-quarter.

There is no specific trend over here from a region perspective. From a product mix perspective on high horsepower and low horsepower, high horsepower grew a little better for us than the low horsepower in this quarter, but again, that also keeps changing.

It depends on the end market demand. Tariffs largely impact US, and that also there was a recent announcement which brought the tariff percentage down.

We are evaluating how that will impact us. Our exports are to various different regions around the world: Asia-Pacific, Latin America, Europe, Middle East.

Those are not the places where tariffs have impacted us at all. I think that for the US, we still evaluate because it is a very recent announcement.

Madam. Madam, could you explain in detail about life cycle stage of our existing platforms and what is the R&D spend focused especially for improvements of existing platform or new next-generation technologies?

And

Sorry, Bala, your question is not clear. We are not able to hear you clearly and not able to understand the question.

Could you repeat it, please?

Yes, madam. Yes, ma'am.

Actually, madam, I'm trying to understand our product life cycle of our existing platform and an upcoming next-generation technologies. How is our R&D is focused on incremental improvements and how this life cycle stage is changing for existing platform and next-generation platform?

I'm trying to understand the regulatory changes in terms of emission norms like beyond CPCB4+ and how is re-engineering or capital investments is happening the next 3 to 5 years?

You're talking about the PowerGen market, I am assuming,

and

talking about product life cycle in PowerGen? Okay.

In PowerGen, we just underwent a huge emission norm change of CPCB4+. For the time being, all the way up to 800 kW, the entire product range has changed, not just for us, but for the entire market.

At least for the next few years, below 800 kW in the PowerGen market, we do not see any other emission norm coming in. Above 800 kWh, there is nothing on the horizon just yet.

I would say that from an emission norm perspective, for now, since we've just gone through a big emission norm change, for a few years, we don't see any changes. From a product life cycle perspective, our belief around the world is that diesel power backup is one of the most reliable backup powers that is available for our customers in the spaces in which they operate and the applications which our backup power is used for.

That remains to be a prime backup possibility for our customers for the time being. While, of course, we spend R&D efforts in evaluating whether battery energy storage systems could be something that our customers would include in their backup power mix or other such things.

We are working with our customers, and our R&D team as well as our sales and marketing teams are working with our customers. For now, for a few years, we do see the backup power space to be provided by the DG gensets.

Madam. Madam, my last question.

I think in that budget, we have seen good announcements for data centers as well as infrastructure, as well as manufacturing side. I'm trying to understand how they are going to benefit especially to data centers, our healthcare, infrastructure, real estate, and manufacturing.

The demand is being driven by more new projects or replacement or upgrade cycles? Also, if you could give some clarities that domestic sales is directly or indirectly linked to central and state government infrastructure spending.

How do you look at on the government capex story?

We are very positive about the government capex story. We do appreciate the announcements made in the recent budget on the capex that the government has announced.

We are watching it, the segments in which they have announced the capex flow. We are waiting to see how that gets converted into projects that could lead for demand for our products.

It takes a little bit of time. Definitely, we are positive about the government's announcement on the capex.

Quickly mention about data center, that would be really helpful, madam.

Yes. From a data center perspective, the tax break that has been announced, it is positive.

We are waiting to see how different data center players evaluate this and what announcements come from them. This is very recent, so as you can appreciate, we are waiting to see how this translates into real orders.

Definitely, the news is positive.

Thank you so much, madam. All the best.

Am I audible?

Yes,

Good morning, ma'am. Ma'am, if you can share the breakup of domestic and industrial business by segment and low horsepower, mid horsepower.

That would be helpful. I have one more question.

Yes, the domestic business into PowerGen and high horsepower, right?

Yes, ma'am.

From a PowerGen business perspective, in the low horsepower, in the Quarter 3, we had ₹67 crores of sales; in the medium range, ₹229; and in what we call the heavy duty range, ₹112 crores; and then in the high horsepower, ₹594 crores. I hope that helps you.

Yes, ma'am. Ma'am, in industrials, compressor, construction, that breakup, that you give every quarter?

Sure. In the industrial business: construction, ₹129 crores; rail, ₹104; marine, we had very good execution in this quarter of ₹92 crores; and the rest is mining and compressors.

Okay. Ma'am, my second question is with regards to improvement in the gross margin.

There has been very good improvement, both sequentially and annually. If you can explain that, and also the ₹50 crore one-time impact, what exactly is this related to?

Okay. The gross margins, there's been a lot of effort that we have been putting to improve our gross margins over the years, working with our suppliers on our material costs, and that is what you are seeing in the numbers.

There is also some one-time supplier benefits hitting over there. Then there is the sales mix, which is not controlled by us, it is defined by the market demand.

There is impact of sales mix as well, which is not repeatable every time. Those are the three factors impacting gross margins.

Now for the one-timer that you asked, this is a true-up of the management cross-charges. Like I said, in some quarters earlier, I had mentioned a true-down.

We had gained benefit at that point in time; this time, it's a true-up. Over the year, it will even out.

Okay. Ma'am, one last question on the industrial business.

The weakness is continuing from second quarter, while earlier quarter was impacted by rains. What explains weakness in this quarter?

Industrial business largely construction activity is down. Construction activity in the quarter, in the Quarter 3, there were two reasons: one, the road construction is not at the pace at it at which it was the same quarter year before, that is one; and then there was delayed monsoons in October, excavator sales did not pick up as much as they should have.

These were the reasons for the construction segment being a little lower. That is actually the largest contributor.

Everything else is more tender-driven, keeps changing quarter-to-quarter.

Thank you, ma'am. That worked for all my questions, and all the best.

Thank you.

Hi, Shveta. Good morning.

My first question is again on gross margin. If I look at quarterly gross margin, it is now almost 20-quarter high of closer to 38%.

Given that we see inflationary pressures in key commodities like copper, aluminum. I agree that your exposure is more towards iron, but still how you are coping up with this inflationary pressures?

Are customers in a position to take incremental cost hikes after CPCB4+ cost hike? Was there any also effect of liquidation of lower inventory which was in the channel?

Thanks for the question, Umesh. Umesh, on the gross margin, you're right, it is definitely at historic highs.

I did explain there is product mix playing there, there is our own effort to improve material cost, and also some one-time supplier benefits. The one-time supplier benefits, the mix, that is not repeatable.

Our improvement actions to improve the material cost, they will continue. Yes, this is historic high.

How are we managing the commodity? Like you rightly said, iron, steel, more stable.

Copper, our associate company does get impacted. The alternator business does get hugely impacted by copper, and copper has been inching upwards.

Recent numbers are around ₹1,320 per kg, INR per kg. We are yet to see how the market will accept these.

Ideally, everyone passes these down to the market with some delay. It is a challenging situation.

We're trying to see how best we can manage to pass these on and also not inflate the costs for the end customer to a huge extent. It's difficult, challenge at this point in time for our associate company.

Just a follow-up on this. Any pricing action that you have taken across nodes in domestic market?

No, we haven't.

Got it. I think my second question is with pertaining to distribution market, where our sales is now almost all-time high on a quarterly basis.

It is at 31% of total sales. That also contributed to gross margin expansion.

I think what is leading to this particular change? Because I believe still CPCB4+, which is having relatively higher electronic content, could have not contributed materially.

That scope still remains for us in future. Still what is changing for us in terms of trajectory for distribution business since last few quarters?

For the last few quarters, distribution business has been focusing a lot on a few things: One, our asset base, of course, has been increasing over the last two years. Distribution business gets more opportunity to service our customers.

They have been working to get as many customers in the fold as possible. That gives peace of mind to our customers, helps us deliver brand promise of reliability, and, of course, generates revenue for the distribution business.

It works both for our customers, for our brand, and for our business. That is really the strategy.

They have been going and trying to work with customers in all segments, be it PowerGen, railways, defense, mining. That is how you see this growth.

This is very broad-based growth, but very deeply entrenched in our philosophy of delivering reliability to our customers.

Just a follow-up on this. In the last warning concall, you mentioned that GST rate cuts was definitely kind of early to assess in terms of changes towards aftermarket business.

Is that leading to market share gain for branded players in aftermarket business? That is also helping us in terms of reporting better growth?

Subsequently, any comments on CPCB4+ electronic content which can lead to higher growth in distribution?

GST impact in the aftermarket business, no. We haven't seen any significant impact that I can share with you.

On CPCB4+, we are waiting to see all the gensets to come out of the warranty phase. Once they come out, then yes.

Not from an electronic content perspective, but from the perspective that CPCB4+ gensets are technologically far more advanced than what CPCB2 were. All engines are electronic.

There is aftertreatment system that goes along with all engines, and the entire genset is a technologically advanced product with a lot of telematics and sensors along with it. Maintaining that and providing peace of mind to the customer is something we focus on.

Definitely, yes, it could lead to better distribution business growth as we encircle customers in the PowerGen space.

Got it. Thank you so much for this opportunity.

All the very best.

Thanks, Umesh.

Shveta, thank you for taking my questions. My first question is in continuation of the previous participant.

In one of the previous conversations, I remember you had flagged that in the initial period of CPCB4+, you obviously expect to get more of the services revenue because the so-called unorganized channel is not prepared to be able to service those engines. Over time, as they learn, some of this market share could start going away.

A, have we reached that stage? Or how do you see basically the services business growth from hereon, given that we've already doubled that number over the last 8 to 9 quarters?

That's question number one, Shveta.

Thanks, Pulkit. Thanks for the question, and I'm definitely very grateful to you for remembering some of this.

CPCB4+ completely is not out of warranty yet. July '23, 1st July '23 is when you would remember both CPCB2 and CPCB2 and 4+ were allowed to operate.

1st July 2024 is when we fully shifted to CPCB4+. 2 years of warranty, we are still in the warranty phase for a large set of CPCB4+.

That phase that I spoke about has yet not fully come. It will likely come '27 onwards.

I hope that helps answer that question.

That is very clear. Secondly, in your presentation, there's this statement which says the consumer price index remains stable compared to last quarter, which shows rapid momentum.

Are you referring to commodity prices here? In that case, how should we look at margins going forward, Shveta?

This was an overarching statement, Pulkit. I would say don't read too much into it.

I think if you had to ask our opinion, we are watchful of commodities at this point in time, largely copper, while iron and steel have remained stable. I would say don't read too much into that CPI statement.

Commodities, yes, that is something to be watchful of for sure.

Sure. This is clear.

Thank you so much.

Yes, thank you. Good morning, ma'am.

Just wanted to understand on the battery energy storage systems that we've launched, the 10 ft and 20 ft container, what is the addressable market in the medium term, the next 4, 5 years for us? How is the customers taking on the product and the inquiries on that side?

Thanks, Devesh. From an addressable market perspective, I think anywhere that you need power is a possible addressable market.

Because one can use battery energy storage system for different reasons: one can use it to move towards cleaner power, one can use it to fulfill backup power needs, one can use it to fulfill excess power needs, one can use it to store excess power in case they are generating power through solar, wind, and other means in their premises. All of these possibilities, the market anywhere there's economic activity and there's use of power and backup power is the addressable market.

It's a huge addressable market. Now how are we seeing this?

We have been generating a lot of inquiries on the products that we launched, and we started generating it right when we launched. Sales in this space are still very, very slow, because most customers are evaluating how does a battery energy storage system fit into their overall energy solution.

I'm talking about large customers, small customers, everyone. It could be a residential realty customer, it could be a bank, it could be a large manufacturing location, because everybody has different energy sources today.

There is a lot of interest. There is a lot of inquiries.

What we are seeing is people are evaluating how a BESS fits into their scheme of things today. How do they want to layout their capex to add a battery energy storage system into that mix?

Is this actually comparable to what they have been buying till now? Customers are evaluating that.

Lot of inquiries, very slow sales.

Okay. Just a follow-up on that.

Let's say in 5 years, what type of revenue share are we targeting on this? A very nascent stage right now, even a ballpark figure would do.

Given we have a range of around 200 kWh to 2 MWh, do you have any number that you can quantify the addressable market currently that we are servicing to in the space?

Right now, Devesh, your modeling will be as good as mine.

On the second part as in how much revenue are we targeting from this, will it be a substantial portion or

Difficult to say. We need to see sales come in, we need to see conversions happening, we need to see customers accepting.

That is when we will put a revenue target to it.

Got it. Thank you, ma'am.

Hi. Thank you, Shveta, for the opportunity.

First question on data center. You did highlight it on an average 25% contribution in domestic PowerGen.

That roughly translates to ₹1,100-₹1,200 crore. Just wanted to understand what was kind of market share?

What was the opportunity and is it like 50% or higher? Second, the kind of growth we might have done in past 1 year in data centers and what is the expectation of growth for the next 1 or 2 years?

Thanks, Amit. Amit, on the data center market share, we unfortunately don't have any syndicated market research which can share the market share numbers with us, I will not be able to share anything on market share.

What I can share with you from a data center perspective is that all kinds of data center players in the Indian market, be it hyperscalers or colo players, they all do see the brand advantage of Cummins and the reliability and aftermarket service that we provide. Due to that, yes, we have been growing in the market, for sure.

There is more activity now in the market with some new hyperscalers joining in and some new announcements that you might have seen. Our expectation is that India will start moving on a faster growth path from a data center perspective, because we were not comparable to US and China till now.

We are still not comparable. Our hope is that with some new announcements that have come, the tax break that has been announced, and the advantages that India as a location can provide, we will start seeing some of this in the next few years.

Definitely, we work with all the customers, all the data center customers who are present in India, global as well as local, and they all recognize the product advantage as well as the brand promise of reliability.

Yeah. Just from the understanding perspective, typically, let's say, for the hyperscale or co-location, what's the addressable market in terms of gensets?

Will it be HHP, heavy duty which is going, and how many numbers or in terms of value per megawatt of load, what is the genset requirement for hyperscale and co-location?

All of them buy high-horsepower gensets, 2,500 kVA and above. Be it a co-located player or a hyperscaler, the market is 2,500 kVA and above.

Right. Is it just for understanding, 1 MW would be requiring how many of gensets there in terms of HHPs, some understanding on that?

No, that can be very different depending on how the data center is designed, their entire location. That can vary.

Understood. Lastly, on the outlook for ex of data center in PowerGen domestic, if you could throw light then excluding commercial real estate and all other sectors which have done well in the past.

What is the outlook ex of data center for domestic PowerGen, how each of the segment is doing? That would be helpful.

Thank you.

Other than data centers, segments which are doing well have been doing well in the past, and we expect them to continue doing well given how the budget's announcement looks like. Manufacturing and infra have been doing well for us and continue to show good inquiries.

Going forward, given the announcements, we believe these will continue. A lot of movement in residential and commercial realty in the last few quarters continues to show us very good momentum and good inquiries.

Those are the segments we expect to continue growing for us.

Lastly, the 25% data center, are we targeting this to increase 30%, 35% or higher number in coming years?

We are expecting broad-based growth in PowerGen, Amit. While data centers will grow, given the economic activity and the infra spend, if that continues to happen and if this budget outlay really kicks in quickly, then we will continue to see growth in, as I mentioned, residential and commercial realty and infra and manufacturing.

If those grow, it is difficult to say if the contribution of data centers will outstrip this growth. Data centers, remember, when announcements come in, from that to actual sale and installation could be a 2 to 3-year time

frame. Right.

Thank you so much, Shveta.

Thanks.

Hi, good morning, team. Shveta, my first question, if you can help us understand a bit more on the export part of the portfolio, regionally how are we seeing the demand outlook across key markets?

Now that the US tariffs clarity is there, how has been the on-ground traction with respect to the new launches we had done in the US for CPCB4+ equivalent products? In your view, when do we start to see some commercial business volume trickle down from the US market?

Hi, Renu, hope you're doing well. Exports demand has been very, very choppy across all markets.

I am not seeing any clear trend from anywhere, really, for the last few quarters. Some quarters, some market, we get some demand due to some movements in that market, and some quarters, we see some other market.

There is no clear trend. Everybody around the world is talking data centers today.

While you asked me about US tariffs and their impact on the CPCB4+ launches, US market is highly focused on serving data center hyperscaler players at this point in time. The entire economic activity in the US is focused on AI and data center space.

We are pushing a lot, now that the tariffs are announced and far better. We are pushing a lot for the CPCB product pickup.

I will have to tell you that everybody around the world is only talking data centers.

Got it. Any color while the December quarter typically tends to be global inventory destocking, beyond that, how are we looking at the export outlook for the current calendar year?

Yes, the destocking did happen. It's become very normal now for us.

We anticipate that. We had anticipated it.

Demand is a little slow in pickup just yet.

Got it. Secondly, when we look at the industrial segment, broadly railways seemed to be a bit soft this quarter.

From an end market perspective, how has been the new product development and ordering from railways, which is relatively soft? Also, if you can share some broad-based comment on some of the end markets in industrial and industrial revenues have been a bit on the sideline, when do we expect a meaningful pickup in that?

Yes. From a railway perspective, I would suggest not to read too much in this quarter, because railway demand, we were getting a lot of good demand over the last few quarters, and before this quarter, we did very good execution in railways.

That can impact Quarter 3. It is a tender-based business, it can be like this.

Overall, our outlook on rail is very positive. The new capex announcements in the budget also show outlay towards railways.

Hopefully, that will get converted towards some projects where we get orders. Positive on rail, do not read too much into one quarter.

From an industrial business perspective, yes, construction and mining are the ones which have been slow. Construction, I explained, there was this delayed monsoon in October, excavator pickup was not there, and then road construction was down.

It's at half the rate of what it was in the previous year, right? Then now the new incentive scheme has also been announced, we're waiting to see how construction plays out.

We think it will be better. Going forward, it will be better.

Mining, the last 6 months For 2 years, mining tenders were not coming in at the velocity at which we have seen in the past. In the last 6 months, mining activity is better.

It has still not converted into the kind of tenders where we participate, still haven't seen those tenders come out yet. Mining and construction were leading to this kind of numbers that you see, which construction definitely positive outlook, railway definitely positive outlook, mining we will see, we are watchful.

Let's see if the tenders come in and then we will be able to say how that will pan out. The segment that has been doing well for us in the last few quarters is marine.

Because there government is focusing, bringing in investments, and we have been working on many new products. Each marine order is ideally a new product, because it is customized for that order.

It's not like a product launch, but it is customized for that order. That we have been able to capitalize on the investment coming in and our execution has been really good.

Sure. Yeah.

Go ahead. Go ahead.

Lastly, well, the broad bucket of commodities have moved northwards, ferrous and pig iron has remained quite benign, and probably that also would have contributed partially to our gross margins. How have you seen the competitive intensity changing over the last quarter or so?

Do the other domestic players continue to remain aggressive on pricing or we have seen those pressures ease out on a relative scale?

No, competitive pressures seem to be the same: very, very aggressive pricing and positioning by competitors, extremely aggressive, especially in the power generation space.

Got it. Thank you and best wishes, Shveta and your team.

Thank you.

Thank you, Renu.

Thank you for the opportunity. Shveta, a few questions from my side.

Firstly, on this competitive intensity, this has been going around for some time. Should we kind of assume that the effects of the same are broadly inside the gross margins the company is reporting?

Or do you think that this should impact gross margins in the future as well?

For now, the impact of the aggressive competitive intensity is baked in into our gross margins, definitely. Because we look at this segment by segment and then we adjust accordingly, and that is what we will do going forward.

As of now, I don't see a humongous impact of this competitive intensity on the gross margins. As I shared, gross margins, the mix impact and if there was some one-time supplier benefit, those are the things more likely to impact gross margins.

Understood. The second question that I had was you talked about the distribution business more from the perspective of endeavors of the company.

If I have to kind of see through the end markets and how they are growing for you for the market as a whole, which markets is it in distribution are kind of firing more for you? The sustainability of that growth there?

Segments that are growing for us: railways definitely, from an aftermarket perspective, and then defense as well as PowerGen. Everything else is contributing, because we provide services to all our customers in the industrial and PowerGen space.

If you specifically ask me: railways, PowerGen, and defense have been growing. As asset base increases on the mining side, we will hopefully see more growth on that side as well.

Sure, that's helpful. The third question that I had was on the commentary you made on BESS that for the next couple of years unlikely that the prime product which is DG sets will be impacted by BESS.

Is there an underlying thinking that beyond the next couple of years, there could be some displacement of demand in favor of BESS and DG sets sales can get cannibalized starting next 2 to 3 years?

Aditya, we believe that in the power generation and backup power space, I'm combining those two, because now in the market, people do combine various energy sources to provide their requirements: grid, solar, maybe wind, maybe genset, and battery. People combine them and see them together as a prime and backup power space.

Our belief is that BESS will become a part of this solution. When that will happen, I'm not able to predict a time frame for that, because it depends on various factors.

It will become a part of the overall energy solution that our customers look for is our belief. Will it displace a diesel genset is difficult to say, because if you look at a diesel genset as providing you reliability when nothing else works, there is nothing like a diesel genset.

Till the time you keep providing diesel, it will run. Even if, for example, some customer is in a flood-like situation for 10 to 12 hours, at that point in time, grid fails, solar fails, and even battery will fail, you will not be able to charge.

At that point in time, it's only a diesel genset, and till the time you provide it diesel, it continues to work. Our firm belief is that diesel genset will remain a part of the mix of energy solutions of our customers, and they will start adopting battery energy storage systems as a part of that mix at the right point in time when the economics work for them.

Understood. Just a last clarification on gross margins.

Again, 38% thing that was there in the third quarter, which is up 300 basis points on a Y-o-Y basis. How much of this would be linked to the one-off elements that you talked about, which was partly product mix and the suppliers' support that came inside?

Maybe a related question over here, in that mix, is exports helping you out from a currency perspective and that kind of is also a benefit that goes away from January?

Currency benefit, not so much. Mix is largely dependent on our own product mix.

When we say mix, it's a product mix. There are certain products which earn us better margins and there are certain products which don't.

It is a mix of domestic and exports. Could be exports, it could be domestic as well.

Mix, that is what we call mix, it's a product mix. Then the one-time benefit, not substantial.

It is there, it is some basis points, but it is not so much.

Thank you, Shveta, for taking all my questions. Thank you so much.

Thanks, Aditya.

Hi. Thank you for the opportunity, Shveta.

Two questions. First one is on data centers.

Who would you typically be competing in the data center market?

Hi, Kunal. We would be competing in the data center space with players who have products available in the above 2,500 kVA range.

You can think of international players in that space.

Would that be largely Caterpillar and Perkins, and say someone like MTU?

For sure.

Yes. While I understand that there is no proper data set as far as market share is concerned, but would it be right to assume you would still be very, very dominant, upward of 60%, 70%, 75% market share there?

I would not be able to say that, Kunal. What I can say is that we do get invited by all customers when they have inquiries, but I will not be able to say what you just said.

Sure. Understand.

Second question is on exports, Shveta. While I understand there is, rightly, too much geopolitical uncertainty, and as you mentioned that the trends in exports are very, very uncertain everywhere, but given that a lot of things are changing, over the next 1 or 2 years, would you still believe that export would be outperforming the domestic or domestic growth will always dominate the export growth as far as Cummins India is concerned?

We have more confidence on the domestic market, because we have seen, as our government has been announcing infrastructure spend, that spend does get converted into actual projects on the ground, and we do see tenders coming up and orders coming in largely. We do have more confidence on the domestic market.

We understand the market, the players, the segments, the needs better. We don't understand exports market to that extent.

Our confidence is more on the domestic market.

Sure, got that. Thank you and best wishes for the future quarters.

Thanks, Kunal.

Thank you. Thank you so much, everyone, for your active participation and engagement in the call today.

Cummins India remains confident in the stability of domestic economic environment. India's FY '26 GDP estimate has been revised upwards to 7.4%, while CPI has remained broadly stable.

Amidst evolving global conditions that may result in short-term volatility, we continue to monitor these developments closely, and we maintain a stable outlook for the medium to long term. With this, I would like to close this call.

Thank you so much, everyone. Have a good day.